INDIA BUSINESS WORLD - JULY - AUGUST - 2007
The Month that was ...

RIG MAJOR NOV BUYS SARA SERVICES & ENGINEERS FOR RS 120 CRORE

NATIONAL Oilwell Varco (NOV), one of the world's largest players in the oil and gas drilling rigs and equipment business, is acquiring 76% equity stake in Sara Services & Engineers (Sara) for about Rs 120 crore. This deal would mark the entry of Houston-based $7 billion major NOV into India. Sara is a Dehradun-based company with a turnover of about Rs 100 crore.

The balance 24% equity stake would be retained by the existing local promoters led by VK Dhawan, who would continue to lead the company as its chairman and managing director. He would be assisted by a few expatriates as representatives of NOV in certain functions such as finance and operations.

Sara currently has two manufacturing plants located at Dehradun in Uttarakhand, formerly Uttaranchal. In addition to these manufacturing units it has franchisee repair shops around the world. Sara also has a wholly owned subsidiary STS in the US which is engaged in distribution of Sara products in the region. Its products include accumulator units, hydraulic tongs, hammer unions, swivel joints, ring joint gaskets and high pressure test units.

Sara promoter VK Dhawan has said, "We had earlier considered a private equity placement to expand our business. But we found a better fit with NOV, which is the largest player in the oil drilling equipment business."

According to NOV director (corporate development) Tom McGee, "NOV has a strong track record of successful acquisitions globally. This deal to acquire Sara will be a significant addition to our global business." National Oilwell which merged with Varco in 2005 to create the largest US based manufacturer of oil and gas drilling equipment, has been making a string of acquisitions in the past. Between 2000 and 2005 it acquired 21 companies.